Eurogamer.dk (via VG247) which suggests that the new game is not only in development, but is a direct sequel to Oblivion. An Elder Scrolls game had previously been touted for a reveal at this year's E3, but did not show. Of course that doesn't mean it's not already a long way into development. Bethesda boss Todd Howard has already mentioned that two new games are in the works and we're going to speculate that one of those has to be an Elder Scrolls game. The big question for many people has been whether the technology would move away from the Gamebryo engine - the recent id acquisition probably wouldn't have provided time enough to base the game on id tech 5, but we can still dream - and a quote in this interview suggests that it is that familiar engine: “That's our starting point - the Fallout 3 tech,” said Howard. “The new stuff is an even bigger jump from that." Perhaps we'll get something concrete about the release in the new year.
So, engine aside, what would you want from a new Elder Scrolls game?